HB234 Alabama 2021 Session

Summary

Primary Sponsor

Steve McMillan

Republican

Session

Regular Session 2021

Title

Highway, roads, and bridges, contracts or subcontracts for public works, provisions requiring a party to indemnify another party for damages caused by the other party prohibited

Summary

HB234 would ban indemnity clauses in private road and bridge public works contracts that shift liability for damages onto the other party.

What This Bill Does

It prohibits public works contracts for roads and bridges from requiring a party to indemnify, hold harmless, or defend another party for damages caused by the other party's negligence or misconduct. Any such provisions in contracts entered after the act takes effect are void. Indemnity is only allowed to the extent damages are caused by the negligence, recklessness, or intentional conduct of the indemnifying party or its employees, and insurance terms cannot be broader than that indemnity. The act applies only to private-party contracts for roads/bridges and does not affect third-party tort claims or obligations to the DOT or awarding entities; it excludes certain indemnities related to sureties and insurer obligations.

Who It Affects

• Private parties (businesses and individuals) entering into road or bridge public works contracts are affected; they cannot require indemnification for damages caused by the other party's conduct and must bear liability for their own actions.
• Insurance providers and entities drafting insurance terms for these contracts are affected insofar as additional insured provisions cannot extend beyond the indemnity allowed by the act.

Key Provisions

• Prohibits indemnity, hold harmless, or defense clauses in road/bridge public works contracts that would make one party liable for damages caused by the other party's negligence, recklessness, or intentional misconduct.
• Defines a 'public works contract for roads and bridges' as contracts for planning, construction, repair, etc., funded by state, county, municipal, or federal funds.
• Allows indemnity only to the extent that damages are caused by the negligence, recklessness, or intentional conduct of the indemnifying party or its agents.
• Restricts insurance provisions by not allowing 'additional insured' status for claims arising from the other party's own conduct beyond the indemnity scope.
• Excludes indemnity for surety on bonds and insurer obligations, and states the act applies only to private-party contracts between private parties; it does not affect third-party tort claims or DOT obligations.
• Effective date: becomes law immediately after passage and governor's approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Highways, Roads, and Bridges